After a 60-day lockdown, airlines finally resumed flights in a staggered manner. However, there is still uncertainty about air travel. The chaos created by the constant back-and-forth between the aviation ministry, the states and flight operations resulted in hundreds of flights being cancelled on the first day of resumption.
Online travel agencies (OTAs), such as HappyEasyGo and Ixigo, have created special trip cancellation covers to provide some relief for passengers who book flights in the next few days. These covers are expensive, but worth the money?
What are you waiting for?
HappyEasyGo sent out promotional SMSes announcing “free insurance on your new schedule” shortly after the decision was made to resume flights. The OTA will offer free rescheduling on a Mumbai to New Delhi flight on 28 May if you pay Rs3,954 instead of the Rs3,704. You will still have to pay the difference for fares. You also have the option to cancel your flight for free if you pay Rs 4,104. However, the convenience fee or cancellation fee will not get refunded.
These rates do not include any additional coverage that comes with a travel policy. To get additional benefits like baggage loss and personal accidents, you will need to pay an additional Rs249 plus tax.
Ixigo also launched Ixigo Assured by tying up to Liberty General Insurance. Although OTAs had offered cancellation coverages for free even before covid-19, most of them discontinued the service or raised the price significantly. Aloke Bajpai (CEO and co-founder of Ixigo) stated that we took the time to research the potential uncertainties associated with this product during the lockdown.
Ixigo’s product does not apply to cancellations by airlines. Instead, the airline will give a credit shell or a full refund. Bajpai stated that the product is designed to reduce anxiety caused by the current situation. Bajpai stated that the goal was to offer cancellation coverage at a cost passengers can afford and to rejig it.
The product premium starts at Rs399, and can go up to Rs599 depending upon the travel date. The premium for a travel booking made within the next 7 days is Rs399, while a travel booking made after 31-90 day would cost Rs599. This product offers you the opportunity to cancel your travel plans and receive a refund of up to Rs5,000 for each ticket.
There are some conditions. Cancellation of the trip can only be made if the cancellation is received at least 24 hours before the departure date. The OTA will not pay for cancellations of flight tickets if the airline is out of service or is closed.
Note that if the ticket cost exceeds Rs5,000, you won’t get the full refund. The government has set a ceiling on airfares for the next 3 months. For most routes, the maximum price is Rs5,000. Airlines can charge up to Rs 10,000 for flights on the Delhi-Mumbai flight, for example. If you purchase Ixigo Assured you will only get Rs5,000 back. There is no limit on convenience fees or other fees that could increase the cost.
Rakesh Goyal (director, Probus Insurance), insurtech broker, said, “If you’re going on a trip in the coming days, having a safety network for your money is not a bad thing.”
Yatra.com still offers the cancellation insurance policy that Digit Insurance has been offering since a while. Mint confirmed that cancellation protection benefits have been suspended for all bookings, new and old, due to the pandemic. You will no longer be able make a claim for the coverage, but you still have the option to purchase it.
These products may be tempting because of the mess surrounding air travel. However, it is important to carefully read the fine print to make sure you understand all terms and conditions. HappyEasyGo offers the ability to reschedule flights without incurring any fees. Akanskha, cofounder and managing director at Refundme.in (a company that provides services to air passengers seeking compensation), said, “Passengers need to understand that although they won’t be paying rescheduling fees, they will have pay for the difference of fares.” If you book a flight at Rs5,000, and want to reschedule, the additional charges for rescheduling will not apply. However, if you purchase a new flight ticket for Rs7,000, then you will need to pay Rs2,000 more due to the difference in fares.
These products often have a catch. It is important to read the terms and conditions carefully. If OTAs offer refunds, it is important to read the terms and conditions to see how refunds will be handled. Check when and how the refund will be made. Akanskha said that you should understand whether the money is a cash refund, or credit shells.
Normal circumstances mean that passengers rarely use OTAs that offer free rescheduling or refund options. Akanskha says that only 1 out of 400 passengers choose to reschedule or refund. The number of people choosing these products could be higher, as the current situation is uncertain. Akanskha said that OTAs are facing a cash crunch and it is unclear how they will handle these claims.
It’s better to wait until it’s not urgent and carefully study the situation before you book your flight tickets.